An analysis of the relationship between knowledge and understanding and the perceived usefulness of the cash flow statement for small and medium-sized enterprises in Nakhon Pathom Province

Abstract

The objectives of this research were to 1) examine the level of knowledge and understanding of cash flow statement preparation among small and medium-sized enterprises (SMEs) in Nakhon Pathom Province and 2) investigate their perceived benefits of preparing cash flow statements. The research hypothesis proposed that knowledge and understanding of cash flow statement preparation are related to the perceived benefits of cash flow statements among SMEs. The sample consisted of 400 SMEs entrepreneurs. Data were collected using a structured questionnaire. Statistical methods employed for data analysis included mean, standard deviation, and Pearson’s correlation coefficient.

            The findings revealed that, overall, entrepreneurs demonstrated the highest level of knowledge and understanding of cash flow statement preparation (= 4.29, S.D. = 0.326). The highest mean score was found in the ability to correctly identify cash inflows and outflows, whereas the ability to use cash flow statement information to analyze liquidity and debt repayment capacity had the lowest mean score, although it remained at a high level. Regarding the perceived benefits of cash flow statement preparation, the overall level was also at the highest level (= 4.48, S.D. = 0.512). Entrepreneurs perceived that cash flow statements clearly indicate financial liquidity, assist in cash planning and cash flow control, and support operational and investment decision-making.

            The hypothesis testing results indicated that knowledge and understanding of cash flow statement preparation were positively related to the perceived benefits of cash flow statements at the 0.01 level of statistical significance (r = 0.584, Sig. = 0.00). The correlation was moderate in strength, suggesting that an increase in knowledge and understanding leads to a corresponding increase in perceived benefits in the same direction.